Did the party exercising undue influence receive a

 Did the party exercising undue
influence receive a benefit ?

49
** Additional

Susilawati v American Express Bank Ltd (2009)
50
1998 and 2005 : incurred
substantial debts to Amex
(through forex trading losses
and loans from Amex).
2006 : Debt ballooned to
US$17.4m.
1998 : Pledged over all the $$ in her
account, in favour of Amex.
The pledge relates to Tommy’s debts to
Amex.
2005 : Claimed undue influence by
Tommy , resulting invalid pledge.
Tommy, son-in-law
Wealthy Indonesian
matriarch
Owes $$ to Amex
** Additional

51

Susilawati v American Express Bank Ltd (2009)
• This principle can be relevant to a business in the following
way as happened in the case above:
Eg: Bank gets X to mortgage his property for the debts of Y.
• If there is “undue influence” between Y and X, in some
circumstances (eg: it is a non-commercial transaction and
X does not appear to benefit on the face of it ) – the bank
may be imputed with it and the transaction may be set
aside.
52

4. DURESS
53

DURESS
• One form of duress:
where a person is forced to enter into a contract because
of:
• violence ; or
• threats of violence .
Source: Microsoft
clipart
54

ECONOMIC DURESS
• Another form of duress is known as economic duress .
• Economic duress relates to unlawful commercial pressure
exercised by one business on another .
• What amounts to unlawful commercial pressure depends
on many factors such as :
 Was the innocent party left with no choice?
 Did the innocent party agree under protest?
 Was there lack of good faith on the part of the party
exercising the pressure?
Source: Microsoft
clipart
55
See
example on
next slide
>>

56
 It had a choice.
 It did not protest.  It didn’t act in good faith.
It had applied to the project consultants for more time to
complete the project. So it did have time to find alternatives.

CONSEQUENCE OF DURESS
• If duress is made out, the contract/changes can be set
aside/undone.
Source: Microsoft
clipart
57

5. MISTAKE
58

Overview of MISTAKE
(no need to remember the categories)
just be aware of the different ways in which mistake can occur
MISTAKE
1. Common Mistake
2. Mutual Mistake
4. Non est factum
3. Unilateral Mistake
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** Additional

1. Common Mistake
• A agrees to sell car to B; B accepts.
• Car was actually destroyed while they were negotiating.
2. Mutual Mistake
• A offers to sell his Toyota.
• B accepts what he thinks is A’s offer to sell a Nissan.
3. Unilateral Mistake
• A offers to sell his Toyota.
• B accepts what he thinks is A’s offer to sell a Mercedes.
• A is aware of B ’ s mistake.
Examples
60
** Additional

4. Non-Est Factum
• An old, illiterate woman was brought by her son to the bank
• He told her that she was signing a confirmation of her mother-son
relationship.
• In actual fact, the document was a mortgage over her house. Her
son had taken a loan from the bank which required a mortgage as
security.
61
Examples
(cont’d)
** Additional

MISTAKE
• Generally, it is difficult to set aside/undo a contract on the
basis of a mistake.